Yes we have learned reactions with malonic ester, forgive me I am a little slow when It comes to thinking these kind of things through. The only two things I can think of having to do with malonic ester at the moment would possibly be decarboxylation and then tautomerization of the enol resulting from decarboxylation. But in order for this to occur this would require heat, which it is not specified in the problem. My second thought would be the removal of the acidic hydrogen between the carbonyl groups by water, thus making the the overall molecule act as a nucleophile and possibly reacting with ethanol to add an akyl group. But then again this would all be occurring in acid conditions, which I don't see happening. So my best guess at this moment would be decarboxylation?